Argentina gas shortage could hit petchems

28 February 2008 22:41  [Source: ICIS news]

BUENOS AIRES (ICIS news)--Argentina’s Bahia Blanca petrochemical complex will likely be affected by the scarcity of gas this year, industry sources said on Thursday.

“There will be an impact caused by this shortage, but its dimensions will depend on different aspects such as levels of water available and temperature levels,” Jose Maria Fumagalli, executive director of the Chemical and Petrochemical Industry Association (CIQyP), said in Spanish.

The scarcity of gas for the South American winter season is worrying the Argentine chemical companies. In 2007 the sector experienced a deep shortfall in gas supplies during a colder-than-normal winter, when it snowed in Buenos Aires for the first time in almost 90 years, Fumagalli added.

The Bahia Blanca petrochemical complex had to shut down for two weeks during winter season due to a gas and electricity shortage.

Argentina is expected to consume even more energy this year, analysts said. Faced with a possible shortage, most of the companies are building stocks.

Solvay Indupa, one of the companies at the Bahia Blanca complex and the third largest consumer of electricity in Argentina, is planning to have its own electric power plant as a backup in case of rationing.

Concerns are rising in the Argentine industry about the lack of long term agreements for natural gas supply between Argentina and its neighbors, Bolivia and Brazil.

According to contractual agreements, Bolivia should send to Argentina some 7.7m m3/day, but in 2007 only sent 6m, and then cut that amount to 3.5m. This was caused by a previous contract that gives priority to Brazil.

In spite of the supply interruptions, Energia Argentina SA (ENARSA) has begun a public bi-national tendering procedure for the construction, equipment and materials for the GNEA pipeline, intended to import gas from Bolivia.

The tendering was open last Tuesday 27th of February, and ENARSA will open the bids next April 27th.

However, Gerardo Rabinovich, director of the technical department of the Argentina Energy Institute, wondered to what extent the project is useful, if Bolivia does not want to hand over what Argentina needs.

By: Cristina Kroll
+1 713 525 2653

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